Economic Growth 101

Scanning Ethiopia’s news headlines in the past year, one couldn’t help but notice the somewhat upbeat and positive economic outlook for Ethiopia. And that’s if one takes news produced out of Ethiopia at face value. In any case, Walta et al. loved throwing words and expressions such as ‘growth in GDP,’ ‘new export markets,’ ‘increased investment opportunities,’ ‘trade expansion’ ‘development’ and ‘increased growth and progress’ randomly and with no obvious attempt to inject reason into an issue of great complexity and consequence to the people of Ethiopia.

Ethiopia’s information gurus are clearly nonchalant about the direct relationship between the global economy and the world’s population. Why “global?” Well, Ethiopia does not have to jump in untested waters. Ethiopia must learn from both the positive and negative experiences of other countries.

Economy is eternally coupled with the population

In 1979, the Chinese adopted an extreme measure in attempt to control the population. The policy of one-child even with its negative attributes has been very successful. Successful to the extent that China's economy during the last quarter century has grown so much that it moved from being a 3rd world country on its way to become a super power.

The Economy of the People's Republic of China is the second largest in the world when measured by Purchasing Power Parity, with a GDP (PPP) of US $8.158 trillion in 2005. When measured in USD-exchange rate terms it is the 4th largest in 2005 with approximately US$2.25 trillion [1] (rising from 6th place in 2004) it is the world's largest developing economy, and its continued growth is critical to the overall health of the world economy and to the welfare of its population of 1.3 billion. Its per capita GDP was approximately US$1,703 in 2005.

The Chinese accredit the one-child policy to their growth in per capita GDP. That and the move from centrally planned economy to market-oriented economy.

As illustrated in the astonishing rate of economic growth that China experienced after the 1979 policy, one could certainly argue that Ethiopia should adopt some kind of population control. However, the point of this article is to show the flaws of showing economic growth without correlating it to the number of people.

Ethiopia in 1990 had a population of approximately 54 million. Since 1990 there have been two wars--one with and estimated death rate of over 100,000 fertile males; Eritrea took 3.5 million; HIV/Aids takes over 120,000 people per year; deaths from other infectious diseases; an estimated 500,000 people left the country in last 15 years; and after all that we have a grand total of almost 75 million. Essentially the population growth rate in the last 15 years is over 25%. Notwithstanding all these natural and man-made calamities, CIA suggests the growth rate to be 2.31% a year.

The EPRDF Economic Growth Claim: Is just that, a claim! Let’s leave it at that.

When Meles Zenawi and EPRDF supporters claim that there has been an incredible amount of economic growth, please mention to them that the population growth has surpassed it.

What is the use of an extra five birr when I have ten more kids to feed?

By Nolawi